The "Trade-Off Theory" of Capital Structure Suggests That Firms Have

question 104

True/False

The "trade-off theory" of capital structure suggests that firms have an optimal level of debt.

---

Definitions:

Apparent Authority

A type of authority perceived by a third party that an agent seems to have in relation to the principal, regardless of whether such authority has been actually granted.

Principal

The primary party to a transaction, agreement, or contract, or the amount of money on which interest is paid or received.

Manifestations

Expressions or signs that something, especially a disease or a condition, is present.

Third Party

An individual or group besides the two primarily involved in a situation or transaction, often providing additional services or acting as an intermediary.